4.0 Marketing Mix
4.1 Product
A product is referred to as any item designed, offered and produced for any target market. A
product can be tangible or intangible. A product can include a good, service or ideas.1 Every product
has a product life cycle. It is important to know what stage a product is on the life cycle and this can
influence its marketing mix. There are four stages in the product life cycle. The introductory stage is
when the product is being researched and developed for sale. The growth stage is when product
begins to become popular with increasing sales. The maturity stage is when the product is popular,
profitable and well established in the market place. The last stage is the decline stage is when the
market is saturated with the product or when the product has become out dated.2
Our product is in the maturity stage of the product life cycle as mobile phones popular, profitable
and well established in the marketplace. At the maturity level, the products strong sale diminishes
as competition appears in the marketplace. At this point, businesses primary objective is to defend
market share by adding features that enhance or differentiate the product from competitors.3
Adding the waterproof features has differentiated our product.
The packaging used for this product would be flattering to the product- elegant, and sheik to fit the
style of the phone. An example of this product-
1
Mylonas et al, 2007, p170
Mylonas et al, 2007, p181
3
QuickMBA
2
This is an example for what my group would like to achieve, as this design is easy to open without
the annoying attributes that are usually distributed with phone packaging that usually incorporate
the motifs to enhance security. This packaging is also eco-efficient not using copious amounts of
tissue paper. The sophisticated style will open, like the next photo shown.
This style is seen to be easy to function and a presentable option. This correlates with the new
modern design of the phone, and implements the elegant and sheik portrayal our group is going for.
4.2 Price
The price of a product is one of the most important aspects of the marketing mix. It can affect the
profit and revenue of the business and ultimately impacts on the survival of the business. The price
of a product covers many of the costs involved in the production or promotion of the product. In
what stage of the product life cycle the product is in can also affect pricing as well as the profit.
There are approaches to pricing that a company can use when deciding on a price for their product.
These include; price skimming, penetration pricing, competitive pricing and price reductions.
Price skimming is used when new products are introduced into the market. The company prices the
product at the high end of the market and slowly reduce the price over time. Penetration pricing is
also used when a new product is introduced to the market however the company set the price very
low in order to gain sales quickly and to flood the market early on. With Competitive pricing the
company takes into account the price of their competitor’s product. This pricing strategy is usually
used in the maturity stage of a products life cycle. Price reductions are generally used on products in
the last stage of the product life cycle to attract consumers.
The pricing strategy we are going to use for the Waterproof Smartphone is Price Skimming. As there
are currently no waterproof smartphones on the market we will be able to price our product at the
top end of the market and gradually reduce the price over time. When more waterproof
smartphones come onto the market we would then switch to competitive pricing so that we do not
price ourselves out of the market. ‘Competitive pricing generally occurs in the maturity stage of the
product life cycle when other similar products have come onto the market and started to push the
price down’.4
4.3 Place
The placement of the product is very important as it ensures that the product ends up with the
consumer in the right place at the right time. To achieve these goals management must make many
decisions in regard to which distribution channel to use and how the physical distribution of the
product occurs.5
A Product is moved to consumers through distribution channels. These channels can be direct
manufacturer to consumer or indirect- manufacturer to retailer to consumer or manufacturer to
wholesaler to retailer to consumer.6
We will distribute our product using the indirect method of manufacturer to retailer to consumers.
The retail stores that will be stocking our product will be; All phones, Digicall, Network
Communications, Optus/yes’, Vodaphone, Telstra store, Xpress mobiles, Virgin mobile stores,
Mobicell and all Department Stores.
4.4 Promotion
Promotion is an important aspect of the marketing mix as it ensures the growth of a product.
Promotional activities are used to introduce a new product to the market, create an interest in a
product, and reinvigorate a product where sales have been dropping. When planning and designing
promotional activities the AIDA model should be used. This stands for getting Attention, holding
Interest, arousing Desire and getting Action.7
The three main promotional methods used to attract customers are advertising, direct marketing
and sales promotion. Advertising is through TV, radio, magazines, billboards and posters. Direct
4
Mylonas et al, 2007, p190
Mylonas et al, 2007, p202
6
Mylonas et al, 2007, p203
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Mylonas et al, 2007, p192
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marketing includes direct mail, leafleting and telemarketing and sales promotion includes free
samples, contests, discounts etc.8
We are going to utilise both advertising and sales promotion techniques to inform our target market
about our product. We are going to create a TV advertisement, Radio advertisement and print
advertisement. Which will be placed in magazines, bus stops, and railway stations and on trains. We
will also use sales promotion with these advertisements by offering special offers and free samples.
Our TV advertisement will be played during the morning news timeslot when the majority of our
target market are having breakfast and getting ready for school or work. It will also be played during
the night-time news for the over 25’s and during the time in the evening when the highest rating
television programs are viewed which is between the 7pm and 8.30 timeslot. Having our
advertisement viewed during these timeslots will ensure our advertisement is viewed by an
audience large enough to cover our target market.
Our Radio advertisement will be played during the morning and afternoon when most people are
driving to school and work. This is appropriate for our target market as it consists mostly of people
who are either at school or working. For those people who do not drive to work we will place our
print advertisement in magazines, at bus stops, railway stations and on trains. This will target our
target market that catch public transport to and from work.
8
Mylonas et al, 2007, p199 - 201